Candidate genes for schizophrenia appear to be associated with the function and structure of specific brain regions. Promising advances regarding the genetic determinants of schizophrenia have raised questions about whether the identified associations between genes and brain abnormalities are diagnostically specific to schizophrenia, and whether the brain pathology of the disorder is poorly described in terms of responses of individual brain regions. To understand how genes predispose the brain to schizophrenia, it is necessary to determine a) what aspects of genetic susceptibility are associated with abnormal brain responses, b) whether associations between candidate genes and brain responses are specific to schizophrenia, and c) whether the neural basis for schizophrenia is effectively understood in terms of the functional interactions of brain regions. Anomalous processing of visual stimuli is one of several promising markers of genetic liability for schizophrenia. Researchers have recently suggested that a deficit in visual integration may result in poor perceptual closure and the problems with object recognition noted in the disorder. Similar abnormalities have been documented in biological relatives of schizophrenia patients, particularly when object perception is made difficult through brief presentation of stimuli or addition of visual noise. Several studies have revealed electroencephalographic (EEG) abnormalities in schizophrenia patients and their biological relatives during object perception. Also, dynamic measures of neural activity appear to have utility in separating schizophrenia from other brain conditions and describing aberrant neural network structures in the disorder. Nevertheless, investigators have yet to clearly identify specific abnormalities in brain function that underlie object perception deficits and reflect the genetic variants that predispose the disorder. The previous periods of Merit Review funding were in part used to gather EEG data during perception of objects in visual noise from over 400 individuals from families affected by schizophrenia or bipolar disorder, and individuals with no family history of these disorders. Time-domain analyses of the EEG data revealed early sensory-level abnormalities over occipital cortex in schizophrenia patients and their relatives. Analysis of the timing and frequency composition of activity over frontal cortex revealed early responses that may modulate visual sensory functions, and late low-frequency abnormalities in schizophrenia patients and their relatives that were associated with a candidate gene related to dopamanergic function in the prefrontal cortex. The proposed studies will examine schizophrenia and bipolar patients, first-degree biological relatives of these patient groups, and control subjects to determine the time-frequency and phase characteristics of brain responses during object perception. The family-based design includes two diagnostic groups and first- degree relatives to test key measures for diagnostic specificity and as markers of genetic liability. We will: 1. Determine time, frequency, and phase characteristics of EEG abnormalities evident during errant object perception in schizophrenia. 2. Determine whether abnormal time-frequency elements and phase synchrony of EEG responses during object perception conform to endophenotype criteria by contrasting data from schizophrenia patients and their relatives with data from control subjects, bipolar disorder patients, and relatives of bipolar disorder patients. 3. Determine whether the abnormal time-frequency elements and phase synchrony of EEG responses during object perception are associated with specific candidate genes for schizophrenia. Our overarching hypothesis is that specific genes for schizophrenia are expressed in abnormal brain function detectable in the time-frequency elements of EEG recorded during the processing of visual objects. We posit that trial-based time-frequency analysis of EEG signals provides a sensitive and dynamic characterization of functional brain abnormalities that mark genetic liability for schizophrenia.